Trade in Renminbi to expand trade

China, on Monday requested Sri Lanka to directly use the Chinese currency renminbi, rather than the US dollar, in trading between the two countries.

Chinas Ambassador to Sri Lanka, Yi Xianliang, speaking at the China Sri Lanka Infrastructure Investment Cooperation Forum in Colombo said Chinese President Xi Jinping had suggested to Sri Lankan leaders to use the Chinese renminbi in trade and cooperation between China and Sri Lanka, as done in many other countries.

“This is done in countries such as Vietnam. Chinese companies will come back. Last year China, Sri Lanka trade is around $ 4.3 billion. If we can use Chinese currency RMB instead of the Dollar, we can do much more bilateral trade,” the Ambassador said.

He further said the Hambantota Port agreement signed between China Merchants Port Holdings and Sri Lanka Ports Authority last week, where China purchased 70 percent of the Port for 1.12 billion dollars, was a win win agreement for both countries and China had no intention of using it as a military base.

“Last Saturday we signed the Hambantota Port Agreement —it is the way we want- it is a business one, and no any strategic or security considerations from Chinese side. We have no idea for a military consideration here. It is just a business idea,” Xianliang said.

However he said while a ‘port was just a port’, it could never be transformed into an industrial zone.

He said he would put all the efforts to push the Hambantota industrial zone forward as this was also the need of the Sri Lankan people.

“Sri Lanka’s major infrastructures are OK. Airports, sea ports etc are fine. But you should have industry zones because your land is limited. You should assemble all industries to one or two zones with support of serious policy and logistics.”

According to the Department of Commerce of Sri Lanka, last year Sri Lankas total bilateral trade with China stood at 4.4 billion dollars, a huge 363 percent increase in comparison to a decade back in 2007, which stood at 965 million dollars.

China is also one of Sri Lanka’s largest foreign direct investors with millions of dollars worth of investments including a 1.4 billion dollar Port City project being constructed close to the Colombo Harbour. (Asia Pacific Daily)

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